The Canary Islands is going to be the Spanish region hardest hit by the economic crisis that will follow the coronavirus health emergency. It is a phrase that its president, Ángel Víctor Torres, has repeated over and over again for days, but that behind it has provisions never before seen on the islands.
For a community whose gross domestic product (GDP) is 35% dependent on tourism and where four out of ten jobs are supported directly or indirectly by the holidays of 16 million Europeans, mainly British, German and Nordic, the “tourist zero” that It began with the state of alarm and will have tremendous consequences that can cost up to 270,540 jobs in that sector alone, depending on how long the activity slows down.
When the evolution of infections and hospitalizations allows to begin to glimpse and the beginning of the lack of confinement in some islands, the Government of the Canary Islands manages an internally prepared report that puts figures to the economic bill of this health emergency.
Its authors start from a finding: Due to its productive profile and the weight that its own taxes have on its income (up to 30% of the total), the Canary Islands is the community most exposed, by far, to the economic repercussions of the coronavirus.
If the average sensitivity to the economic impact of the coronavirus in Spain is taken as a reference value of 100, this report warns that the Canary Islands is at values of 140.80. The Balearic Islands follow, with 130.0; Andalusia, with 110.08; the Valencian Community, with 109.79; and Murcia, with 108.51.
On the opposite plane, according to this report, the communities with the least sensitivity to the economic impact of COVID-19 will be Castilla-La Mancha (75.12 points over a national average of 100), Navarra (81.96), Aragón (82 , 81) and Castilla y León (86.65).
“It is expected that the Canary tourism sector will take several months, if not years, to recover and complete the full reopening. This is due to the high dependence of the Canary tourism sector on various European source countries, particularly the German and the British, and its impact on air connectivity, which will be activated gradually, and more slowly, “notes this study.
And all this even if the state of alarm in Spain ended in the short term and the internal restrictions were lifted shortly, because the effects on international air traffic will continue for a time. This will lead “to the collapse” of the Canary Islands tourism sector, which depends on 87% of foreign clients arriving by plane, say those responsible for this study.
How long this situation lasts, which the sector has begun to call “tourist zero”, will depend on the depth of the damage.
If the “zero” lasts only three months, the GDP of the Canary Islands will fall by 8.8% and 67,635 jobs will be lost; if it lasts up to six months, the invoice will be a decrease of 17.5% of GDP and of 135,270 jobs; And if the absolute stoppage in tourism continues for up to a year, the collapse will be 35% of GDP and 270,540 jobs.
This table summarizes the impact on the Canary Islands economy of COVID-19 based on the duration of the tourist break and the intensity of the contraction of its activity (-70%, -80%, -90% and -100%).
CONTRACTION OF THE TOURISM SECTOR
DURATION 70% 80% 90% 100%
IMPACT ON GDP
3 months -6.1% -7.0% -7.9% -8.8%
3-6 months -12.3% -14.0% -15.8% -17.5%
6-12 months -24.5% -28.0% -31.5% -35.0%
3 months -47,345 -54,108 -60,872 -67,635
3-6 months -94,689 -108,216 -121,743 -135,270
6-12 months -185,378 -216,432 -243,486 -270,540
The authors of this report stress that the figures in this table possibly “underestimate” the impact of the coronavirus crisis on the GDP and employment of the Canary Islands, because it has been prepared from the premise of a contraction of activity “only” in the tourism, without taking into account the evolution of the rest of the economic sectors.
The 270,540 lost jobs that this study predicts for the worst tourist scenario (a total one-year hiatus) can be correlated with the main figures that the labor market in the Canary Islands had on March 1, before the pandemic spread. : The community had 818,140 workers affiliated with Social Security and 207,837 registered on the unemployment lists.
Losing 270,540 jobs for the Canary Islands means cutting one out of every three jobs (33% contributing to Social Security) and more than doubling the numbers of registered unemployment.
And the sources that have corroborated to Efe that the Government of the Canary Islands manages this report warn something else: it was done about two weeks ago, so some of their calculations could fall short regarding the impact that the community uses to demand a plan from the State specific economic recovery on the islands.
“There is an enormous degree of uncertainty about the way the crisis in the archipelago will adapt: ’U’ or ‘L’. The only certainty is that it will not be in the ‘V’ shape. The socio-economic system of the Canary Islands will again be subjected to a high level of stress, “the authors summarize. Translated: the rebound will not be vigorous and immediate (‘V’), but will come after a period of stagnation (‘U’), which could last even longer than expected (‘L’).
José María Rodríguez